Exploring Estate Tax Changes In New York State

An article that appeared in Forbes last year discusses the estate tax exemption in New York State and what it means to those residing in New York. It did note that the tax exemption had doubled as of last year and is slated to eventually match the larger and more robust federal tax exemption by 2019. As a note, the federal exemption is projected to reach a level of $5.9 million in the next few years. Digging a little deeper into the 2014 state level changes there may be reason for concern.

As mentioned, one interesting change that happened in 2014 regarding the NY estate tax laws was that after April 2014 the state exemption increased to just over $2.0 million dollars. One caveat is that there is a “cliff” of sorts in place wherein if an individual passes away with an amount (5%) even slightly over the exemption that they are surprisingly taxed on the full worth of the estate.

This is a real concern with regard to the rules legislated into law in NY in 2014. Another key issue is that of a lack of portability as is the case at the federal level. From a federal perspective a surviving spousal member may shelter twice as much net-worth estate value without the need for complex trusts. There are several other concerns with the changes put into place in NY in 2014. For example, specific tax treatments regarding estate planning and general depreciation all deserve a closer look, preferably at the state legislative level.

In short, the rules that were established during 2014 are being viewed by many experts within the industry as exceedingly complex and restrictive to residents of the state. Estate attorneys, accountants and insurance professionals will likely find the new rules and laws to be overbearing and burdensome to those wishing to protect a family estate or legacy.

Even taxable gifts as of the 2014 changes require a three-year retrospective look-back. In essence, these types of gifts are pulled back into the estate. These concerns and others require being addressed at a legislative session so that the residents of New York can feel more confident in passing on a legacy or estate to a spouse or to heirs.

Silver Rock Partners understands the concerns of high-net-worth individuals and affluent families with regard to estate tax efficiency. We follow existing and proposed legislation at the state and federal levels so as to provide clients with exceptional service and outstanding high-end estate planning. Our firm is dedicated to helping clients protect wealth and maintain the highest levels of tax efficiency. When expert estate planning is required it is best to work with a team that genuinely understands the complexities of estate tax code, rules and laws. Contact one of our dedicated advisers today.